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The U.S. Court of Appeals for the Second Circuit has affirmed imprisonment for a Venezuelan financier and former New Canaan resident who was sentenced in 2015 to 15 years behind bars for wire and securities fraud in what prosecutors called “the biggest Ponzi scheme in Connecticut history.”

In March 2011, appellant Francisco Illarramendi, 49, pleaded guilty to two counts of wire fraud, and one count each of securities fraud, investor fraud and conspiracy to obstruct justice after a Ponzi scheme defrauded investors of at least $382.2 million. He was sentenced on Jan. 2, 2015, by Judge Stefan Underhill to 156 months of imprisonment followed by three years of supervised release, plus payment of approximately $370 million in restitution.

“For more than five years, Francisco Illarramendi’s severely misguided attempt to conceal an initial loss of $5 million ballooned into an elaborate fraud scheme that caused investors and creditors to lose hundreds of millions of dollars,” First Assistant U.S. Attorney Michael J. Gustafson said in a 2015 press release. “Through it all, he still managed to live well, receiving more than $20 million in personal benefits. I want to thank our partners at the FBI and SEC for unravelling this complex scheme, and acknowledge the efforts of the court-appointed receiver who has recovered more than $300 million that will be distributed to the victims.”

According to court documents, Illarramendi founded the Michael Kenwood Group in 2006 in Stamford, which was not registered with the U.S. Securities and Exchange Commission. A hedge fund he advised lost approximately $5 million. “Rather than disclose to his investors the truth about the losses incurred, Illarramendi concealed this information by engaging in a scheme to defraud and mislead his investors and creditors,” the U.S. Attorney’s Office for the District of Connecticut wrote. “As a result of the scheme, the hedge funds and related entities managed and advised by Illarramendi had outstanding liabilities that greatly exceed the true value of their assets, causing the funds’ investors, creditors and service providers to lose more than $700 million.”

While awaiting trial, Illarramendi reportedly failed to disclose that he spent most of a $630,000 state tax refund, resulting in revocation of his bond.

While incarcerated, in November 2016, Illarramendi filed a habeas corpus petition claiming he had been denied counsel of choice due to his assets being frozen in a related SEC civil proceeding and that his counsel provided ineffective assistance during plea negotiations and sentencing.

In August 2017, Illarramendi filed two additional motions pro se in district court seeking “supervised release pending habeas proceedings.” The district court denied the motions, stating that it “has no authority to grant supervised release to a sentenced inmate.” Illarramendi appealed unsuccessfully, but was granted a motion for leave to proceed in forma pauperis. Though the Second Circuit affirmed the district court’s denial of Illarramendi’s motions for supervised release, it agreed with the appellant that a certificate of appealability was not required when appealing orders from a habeas proceeding.

“We agree with the United States that neither supervised release nor bail is warranted here and therefore GRANT the motion for summary affirmance,” the court wrote. “A certificate of appealability from the district court’s order is not necessary, however, because a denial of supervised release or bail is not a ‘final order that disposes of the merits of a habeas corpus proceeding.’ (Harbison v. Bell, 556 U.S. 180, 183, (2009)).”

“Although Illarramendi’s motion was for supervised release, we liberally construe his pro se motion as seeking release on bail,” the court added. “The government accepts this interpretation in its memorandum in support of its motion to summarily affirm.”

Assistant U.S. Attorney Michael J. Gustafson could not be reached for comment.